Nike "We Just Did It"

Nike just did it. It dropped out of the S&P 100. Even knowing a brand well, using its products daily, and watching it dominate for years, doesn't mean it's a good investment forever. I'm not roasting Nike, I like the brand. Let's look at this through an investor's lens.

Nike is being removed from the S&P 100 index, but it remains in the S&P 500. The sportswear giant's stock has fallen approximately 78-80% from its 2021 peak, wiping out over $220 billion in market value. This removal, effective September 21, 2026, marks the first time Nike has been dropped from the S&P 100 since joining in 2008.

Reason for Exit: The decline reflects weaker sales, intense competition, and a difficult strategic reset, causing Nike to lose its status as a core mega-cap blue-chip stock.

Replacements: Nike will be replaced by four technology companies: Dell Technologies, Palo Alto Networks, Arista Networks, and SanDisk.

Other Exits: Honeywell Aerospace, Simon Property Group, and Colgate-Palmolive are also leaving the S&P 100 in this quarterly rebalance.

Nike's struggles didn't happen overnight. There were several warning signs over the past five years.

The strategic misstep (2020–2021): Under former CEO John Donahoe, Nike aggressively shifted from wholesale to direct-to-consumer (DTC), pulling back from wholesale partners and betting on its own stores and app. The pandemic-era boom masked the damage.

First cracks (fiscal year ending May 2024): Nike closed with the slowest growth in a decade and posted its first digital sales decline in 9 years. This is when the strategy's flaws became undeniable.

The stock crash - June 28, 2024: Nike's Q4 FY24 earnings showed revenue down 2% and guided Q1 FY25 down ~10%. The stock fell 21% in a single day, the worst trading day in company history. This is the point most people identify as "when it started."

Confirmation (fiscal year ending May 2025): Full-year revenue dropped 10% to $46.3B (the first time below $50B), and profit plunged 44%. Eight consecutive quarters of China sales declines were already underway.

Tariffs and continued decline (2025–2026): New U.S. tariffs on Chinese goods hit margins hard, and the stock kept falling through 2026 to its current 12-year low near $39.

Nike is a great lesson for investors who didn't pay attention to the early signs. Never take a giant company's past performance for granted. Even if you pick a stock that performs well, was it luck, or did you actually check its performance? What was your reasoning? Your price target, and exit price? This is how you separate luck/gambling from conscious investing. Nike won't go bankrupt, but it just had its worst years. It's worth following how they manage to come back from this.

My point: as I explained to some of my students, the company replacement in the index is the key thing here. I strongly advise beginners and long-term investors to have at least one ETF in their portfolio, and this is the beauty of them: the safety. Even when one or a few companies fall out, they get replaced by others. You really can't go wrong by having ETFs. Nike is proof of exactly why.